ResearchJanuary 17, 2020

Blockchain Could Save a Country Billions, Report Says

How the UAE adopts the crypto technology could give other nations a template.

Reported by Steffan Navedo-Perez

If the United Arab Emirates (UAE) successfully implements emerging blockchain technology, the nation could see a plethora of benefits across the board, according to a joint whitepaper by the Centre for the Fourth industrial Revolution and the World Economic Forum.

How the Middle Eastern nation adopts the new crypto technology could serve as a template for other countries, which are eyeing it. The strategy, was launched in recent years to help advance their legislative efforts, to improve the morale of their citizens, and to advance government efficiency. The strategy intends to provide a “digital transformation” for the UAE.

The government of Virginia is also studying the impacts of blockchain and cryptocurrency, and introduced legislation to form a study group last year dedicated to researching the topic.

For the UAE, the efficiency would occur by the itss reducing printing needs by over 398 billion printed documents annually and saving 77 million work hours annually. Chief among the benefits provided through implementation of blockchain would be the saving of AED 11 billion (USD $3 billion) a year in transactions and documents processed routinely.

“The use of blockchain technology will not only allow operational cost reduction but will support the digital security of national documents and transactions, as well as accelerating decision-making processes,” the report said.

Small Persian Gulf principalities are serving as proving ground for blockchain. Dubai, under its own blockchain strategy, aspires to become “the hub for blockchain intellectual capital and skill development,” the report noted.

The report emphasized many challenges the UAE may face in adopting and implementing blockchain technology, as shown by historical examples of other jurisdictions who vied to do the same. The challenges are largely societal issues, and not based on the technology itself.

The report’s authors suspect there may be difficulty in aligning the interests of required stakeholders in corporations, service providers and the government. Education of the technology and awareness of its intricacies is also considered to be an important obstacle, as well as unclear regulatory implications.

“Survey participants were unified on the opinion that the core challenges in blockchain implementation remain in the operational and regulatory sphere rather than on the technical side,” the report said.

“The public sector saw education and alignment with stakeholders as the most pressing challenge, whereas the private sector’s key concern resonated around regulatory uncertainty,” the report added.

Those same issues are propping up in the United States as well. The US Senate last summer held hearings on potential regulatory frameworks for digital currencies. “The digital currency and blockchain ecosystem is diverse, and care must be taken in determining what gaps may be present in the existing framework and developing a more comprehensive approach,” said US Sen. Mike Crapo, an Idaho Republican

The UAE and Dubai’s blockchain strategies have so far “advanced the development of a thriving blockchain ecosystem within less than three years, contributing towards the nation’s vision of becoming an innovation-drive economy,” the report said.

The government of Virginia is also studying the impacts of blockchain and cryptocurrency, and introduced legislation to form a study group last year dedicated to researching the topic.